Presentations on HAL Trust and Seraphim Space Investment Trust from the Value Investing Seminar
In Tuesday's e-mail, I shared three stock ideas from the recent Value Investing Seminar in Italy. And in yesterday's e-mail, I shared three more ideas.
Today, I'd like to share two additional pitches from other presenters...
1) Lena Cassidy and Piyari Paienjton of UWC Endowment Management pitched Dutch diversified holding company HAL Trust (HAL.AS). You can see their full presentation here.
HAL stands for Holland America Line, a cruise line once owned by the wealthy Van der Vorm family. They sold the business to Carnival (CCL) in 1989 for $625 million and used the proceeds to form HAL Trust to manage their fortune. They currently own around 68% of HAL shares.
Cassidy and Paienjton call HAL the "Dutch Berkshire Hathaway" because, like Berkshire, HAL owns both publicly traded stocks and privately held companies. And it has a similarly stellar long-term track record: In the past 35 years, HAL's net asset value ("NAV") has compounded at 14.3% annually versus Berkshire Hathaway's (BRK-B) 13.3%.
The presentation starts by breaking down HAL's reported NAV of 15.5 billion euros:
This means HAL, with a market cap of around 10.9 billion euros at the time of the presentation, is trading at a 30% discount to NAV.
But Cassidy and Paienjton think HAL's actual NAV is 22.6 billion euros, meaning that it's trading at a more than 50% discount:
Why is HAL trading at such a large discount? They cite four reasons: some recent poor investment decisions, a very secretive family of owners, the retirement of the chairman, and the lack of a catalyst for shares to rip higher and close the discount.
These are all valid concerns... which is why I'm not tempted by the stock. There are quite a few European holding companies like HAL, and they're often value traps unless there's a catalyst, which doesn't appear likely in this case.
2) My friend Norman Rentrop, who runs a family office in Germany, pitched a London-based venture-capital fund: Seraphim Space Investment Trust (SSIT.L). You can see his full presentation here.
The fund invests between $250,000 and $25 million in companies around the world in the field of space technology ("SpaceTech"), which is booming in many areas:
Seraphim claims to be five times larger than any other investor in SpaceTech:
It also claims its track record is in the top 10% of small venture-capital firms:
The stock went public in the booming IPO market of 2021 and proceeded to lose 80% of its value. But it has rebounded strongly in the past year and a half:
Even after the stock's recent rally, Norman believes it's trading at a 30% discount to NAV and argues that it's an attractively priced speculation.
I tend to agree – with an emphasis on the word "speculation." I don't think you can value a stock like this based on NAV because all of the holdings are private, so their valuations are very subjective. This is a bet on the management team and the sector – both of which are compelling... But keep in mind, this stock could trade anywhere.
Tomorrow, I'll share a few final ideas from the seminar, so stay tuned!
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.